When British-born retailer John Dixon this year accepted the job of turning around Australia's oldest department store, David Jones, he walked into a company with no customer relationship management system and no workable internet platform.

These two discoveries by Dixon, who worked at Marks & Spencer for 25 years, tell you a lot about the lack of investment by leading Australian retailers in areas that are fundamental to success in 2016.

Leading department stores in the United Kingdom and the United States have online sales equal to about 13 to 15 per cent of sales.

Dixon has set a target at David Jones of 10 per cent online sales within three years. That is an ambitious goal considering online sales are now at 3 per cent of total sales and the new internet platform has yet to be built. David Jones will soon reveal the name of the company appointed to build the internet platform. But suffice to say that David Jones' parent, South Africa's Woolworths Holdings, has confidence that the platform will work as well as any of those operating in the UK and the US.

Dixon is not ready to give any major interviews. But it is possible to piece together what he will do to transform David Jones by examining documents released as part of an investor roadshow, Dixon's limited public comments and several exclusive stories by The Australian Financial Review's Sue Mitchell.

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It is clear from these various sources that Dixon is taking a slow and steady approach to ensuring David Jones returns to its former glory as one of the leading high-end department stores in the world.

He plans to spend $200 million making the David Jones Elizabeth Street store in Sydney the best department store in the southern hemisphere. An extra floor of available space will be added by utilising the basement and two additional floors will be made available by shifting administrative staff from Sydney to Melbourne.

Dixon's strategy for reconnecting David Jones with its customers has got off to a good start. The company has installed a new CRM system which is up and running. It needs to be optimised.

The development of a new internet platform will take most of next year but when completed it will have all the functionality that Australians have come to expect from leading international retailers such as Nordstrom and J. Crew.

When Dixon joined David Jones as CEO in January he came to the task with a deep understanding of the values and culture at Woolworths Holdings.

For the past 15 years Dixon had been travelling from his job at Marks & Spencer in London to the Woolworths Holdings operations in South Africa as part of a long-term strategic partnership between the two companies.

The links between Marks & Spencer and Woolworths Holdings go back a long way and continue to be quite deep. Marks & Spencer was a shareholder in Woolworths Holdings prior to the Second World War.

There is an expression in the retail trade that great retailers have retail in their blood. That appears to be true of Woolworths Holdings chairman Simon Susman. Susman, who is the great grandson of one of the founders of Marks & Spencer, joined Woolworths in 1982 after working at Marks & Spencer.

Plans to boost food offering

During his 25-year career with Marks & Spencer, Dixon worked closely with that company's then chief executive Stuart Rose. Rose, who is now Baron Rose of Monewden, or Lord Rose, is a director of Woolworths Holdings.

A key strategic component in the long-term success of Marks & Spencer has been its food offering. Dixon is planning to lift the quality of the food offering at David Jones through partnerships with leading chefs and restaurateurs.

David Jones already has signed up uber chef Neil Perry. When the Market Street store in Sydney is relaunched it will be promoted as a leisure destination.

The Woolworths Holdings connection with Australia is strong thanks to the appointment of former Westpac Banking Corp CEO Gail Kelly to the board late last year. The other Australian on the board is Patrick Allaway, who is a director of Fairfax Media, publisher of the Financial Review.

Dixon will not make the mistake that has been made by so many Australian retailers who have harmed the long-term viability of their operations by entering into too many property leases.

The Dixon strategy will be property light. A good example is the new store at the Barangaroo office development in Sydney. This location only takes up 1400 square metres compared to a typical David Jones store in a shopping centre of 10,000 square metres. But the Barangaroo site is exposed to daily passing foot traffic of about 25,000 people.

The Barangaroo store stocks a limited range of goods, but the entire David Jones inventory will be available online. The goal is to have the store become an important click and collect destination. This is referred to in the trade as an "endless aisle".

Dixon is believed to regard the inevitable arrival of Amazon in Australia as a good thing because it will provide consumers with more choice and force local retailers to lift their game.

It is ironic that while at Marks & Spencer, Dixon worked in partnership with Amazon in general merchandise in order to help the company understand the symbiotic relationship between bricks and mortar retailing and internet retailing.

Dixon's presentation to analysts two weeks ago said that once the current phase of transformation was completed the company would move to deal with regional loyalty, the supply chain and product sourcing.

Dixon's loyalty project will probably involve offering a loyalty points program similar to the Myer One card while maintaining the David Jones credit card.